The Enron case made headlines because fraud and deception of such magnitude is unusual in the corporate world. Washington fraud and deception of a much greater magnitude doesn't make the headlines because it's standard practice.
According to David Walker, the head of the U.S. General Accounting Office, government property, plant and equipment cannot properly be accounted for. It is often impossible to determine the exact cost of loans and loan guarantees. Large liabilities, such as that for environmental cleanup and future health benefits, cannot accurately be determined.
Since the federal government uses cash accounting, the long-term liabilities of programs like Medicare and Social Security are largely hidden. Costs for programs like federal deposit insurance are not accounted for at all, although the government laid out $130 billion for such commitments during the savings and loan crisis just a few years ago.
Congress is, in effect, the federal government's board of directors. It's hypocrisy, and worse, when they denounce the boards of directors of Enron and Arthur Andersen for hiding debt, shoddy accounting and fleecing their shareholders when they are doing the same to their shareholders, we the American people. It's high time we demand that Congress use the Generally Accepted Accounting Principles that they demand of others.
I'm Walter Williams
Nightly Business Report
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